/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150602.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, June 2, 2015, Vol. 16, No. 107 Headlines A N T I G U A & B A R B U D A ANTIGUA & BARBUDA: IMF Urges Gov't to Immediately Cut Spending AYOUSHE BEAUTY: Workers Deny Rumors of Imminent Closure B R A Z I L GENERAL MOTORS: Gives Workers Paid Time Off to Cut Production PARANAPANEMA: S&P Affirms 'B+' CCR & Revises Outlook to Positive C A Y M A N I S L A N D S ABSOLUTE PARTNERS: Creditors' Proofs of Debt Due June 24 ABSOLUTE PARTNERS MASTER: Creditors' Proofs of Debt Due June 24 AJW MASTER: Creditors' Proofs of Debt Due June 5 AJW MASTER II: Creditors' Proofs of Debt Due June 5 GS PRIVATE: Creditors' Proofs of Debt Due June 26 INVEST AD: Commences Liquidation Proceedings INVEST AD CARRY: Commences Liquidation Proceedings MAHOGANY LTD: Creditors' Proofs of Debt Due June 25 MASTER GOAL: Creditors' Proofs of Debt Due June 25 PARTNERS EMERGING: Commences Liquidation Proceedings SHAMROCK: Creditors' Proofs of Debt Due June 15 VENTRA (BARBADOS): Commences Liquidation Proceedings D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Fitch Affirms 'B+' LT IDR; Outlook Stable J A M A I C A JAMAICA: Moody's Upgrades Government Bond Rating to Caa2 JAMAICA: Improved Moody's Rating Will Help Country, Minister Says M E X I C O AXTEL S.A.B.: Fitch Affirms 'B' IDR; Outlook Stable BANCA MIFEL: Fitch Raises IDR to 'BB'; Outlook Stable BANCA MIFEL: Fitch Ups Viability Rating to 'bb' MAXCOM TELECOMUNICACIONES: S&P Affirms 'B-' CCR; Outlook Stable QUALITAS CONTROLADORA: S&P Affirms 'BB' Counterparty Credit Rating P U E R T O R I C O PUERTO RICO AQUEDUCT: S&P Retains 'CCC+' Rating on Watch Neg. PUERTO RICO ELECTRIC: Puerto Rico Gets $3.5BB Plan to Fix Utility X X X X X X X X X * Large Companies With Insolvent Balance Sheets - - - - - =============================== A N T I G U A & B A R B U D A =============================== ANTIGUA & BARBUDA: IMF Urges Gov't to Immediately Cut Spending -------------------------------------------------------------- The Daily Observer reports that the International Monetary Fund is warning the Antigua and Barbuda government that its ABLP administration's current policies do not appear sustainable. In its third post program monitoring assessment, the IMF says urgent actions are needed including immediate spending cuts, according to The Daily Observer. The IMF is encouraging the authorities to adopt a comprehensive medium-term fiscal consolidation program starting in June 2015, the report relates. The IMF directors said by the time June comes the government should start announcing new measures, the report notes. They, as per usual, recommend lowering the wage bill -- presumably either by cutting staff or slashing salaries, the report says. They further advise strengthening tax administration to improve collections, cutting spending on goods and services and giving less money to state owned enterprises or statutory corporations, the report discloses. They also suggest improving expenditure and payment control, reducing public sector cross debts, and strengthening oversight of state-owned enterprises, the report notes. The report discloses that the IMF recognized that funds from the citizenship by investment program are helping the situation but warned the extra money should not encourage the government to loosen plans to sort out its poor financial situation. The fund said on current policies, economic growth would remain moderate and the fiscal situation would improve but cash flow problems would persist and the debt situation could become even more unsustainable, the report relays. The directors threw their support behind continued efforts to attract foreign investment but overall they say they remain concerned that under current policies, the country's ability to repay the Fund may be at risk, the report adds. AYOUSHE BEAUTY: Workers Deny Rumors of Imminent Closure ------------------------------------------------------- The Daily Observer reports that the staff at Ayoushe Beauty Supply & Beyond have denied claims that the city business is facing imminent closure, just hours after Observer media witnessed employees removing much of the stock from the store and loading it onto two trucks around midnight Wednesday, May 27. The rumor also comes just days after US marshals escorted the owner of the business, Morrad "Ayoushe" Ghonim from the country to face a murder charge in the 1992 shooting death of his first wife, Victoria Maria Ghonim, in the US, according to The Daily Observer. When the business opened at daybreak, Thursday, May 28, the usually clothed mannequins stood naked in the display window, while the shelves and racks where ladies' clothing and other beauty products were once stored, were empty, the report discloses. Scores of residents flocked the store as a sale was suddenly announced for the few remaining items, the report says. But when Observer media contacted the business via phone, twice, and visited the location around mid-morning, a staff member said: "We don't have a closing down sale. We're having the usual annual event before Carnival," the report relays. For the past week, there has been speculation that the business will shut down as Mr. Ghonim faces prosecution in the US courts, the report relays. But his wife, Nadira Lando-Ghonim, told Observer media during an interview that employees had no reason to worry about their jobs since she would not be closing the business, the report notes. Ms. Lando-Ghonim also said the services to the community will remain the same, the report relays. The Ayoushe business has been a big supporter of Carnival, and sponsoring several events each year, including a local Ms. Antigua contestant, since it opened in April 2011, the report adds. =========== B R A Z I L =========== GENERAL MOTORS: Gives Workers Paid Time Off to Cut Production ------------------------------------------------------------- EFE News reports that General Motors will give 15 days of paid vacation to 1,700 workers at its factory in the Brazilian city of Sao Jose dos Campos in Sao Paulo state in order to cut back on production, union officials said. The days off will be between June 15-30 and will specifically affect the assembly line of the Chevrolet S10, the city's metalworkers' union said, according to EFE News. Several car manufacturers have forced workers to take vacations in order to reduce production in response to the decline in sales, while others, as in the case of Mercedes-Benz, have laid employees off, the report notes. In early May, General Motors gave paid leave for an indeterminate length of time to 467 employees at its factory in the city of Sao Caetano do Sul, while Volkswagen did the same with 8,000 of the 13,000 workers at its plant in nearby Sao Bernardo do Campo, the report relates. Vehicle production dropped 17.5 percent between January and April compared with the same period last year, while sales were down 19.2 percent for that four-month period, according to figures of the National Motor Vehicle Manufacturers Association, or Anfavea, the report notes. Anfavea estimates that Brazilian manufacturers have reduced their labor forces by 9.5 percent so far this year, from the 144,200 workers they had last December to 139,000 in April, in order to adjust to the lower demand, the report notes. The cutback looms even larger if compared with the 154,200 workers employed by vehicle manufacturers in April 2014, the report discloses. PARANAPANEMA: S&P Affirms 'B+' CCR & Revises Outlook to Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its national scale rating on Paranapanema S.A to 'brBBB+' from 'brBBB'. The outlook on this rating is positive. S&P also revised its outlook on its 'B+' global scale corporate credit rating to positive from stable. In addition, S&P affirmed this rating. The rating actions reflect Paranapanema's stronger and more stable EBITDA margins and cash flow generation, thanks to the hedging strategy the company has implemented in the past few quarters to provide cushion against copper-price volatility. Also, Paranapanema has benefited from high premiums for refined copper and from its ability to rapidly adjust its portfolio of clients amid a weak demand in Brazil, which used to account for about 60% of the company's sales in the past few years. The positive outlook indicates that an upgrade can occur in the next 12-18 months if consistently stronger and more predictable FOCF generation reduces debt levels and S&P's view of Paranapanema's financial risk profile improves. S&P's "weak" business risk profile on the company reflects its high concentration in one production asset; limited scale, scope, and diversification; exposure to a cyclical and capital-intensive industry; very tight, though improving, operating margins; and the potential competition from importers and domestic manufacturers amid weak global demand. Nevertheless, Paranapanema's exports soared 78% in the first quarter of 2015 amid a weak demand in Brazil. It also became more competitive on weaker Brazilian real, in which about 15% of the company's costs are denominated. In addition, Paranapanema isn't subject to the same tax duties as importers, which supports the company's leading market position in Brazil. In addition, the recent closure of the Capuava plant should improve operating margins, owing to lower fixed costs and higher capacity use at the main plant, which should raise the company's operating efficiency. S&P still assess the company's financial risk profile as "aggressive" despite somewhat stronger credit metrics for the category. This is mainly due to the historically high volatility in earnings and working capital management, which S&P wants to monitor for a longer track record to assess management's commitment to conservative financial policies, including the use of derivatives, investments, and shareholders' remuneration strategy. ========================== C A Y M A N I S L A N D S ========================== ABSOLUTE PARTNERS: Creditors' Proofs of Debt Due June 24 -------------------------------------------------------- The creditors of Absolute Partners Special Opportunities Fund Limited are required to file their proofs of debt by June 24, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on May 15, 2015. The company's liquidator is: Henry Li Prosperity Tower, Unit 2102, 21st Floor 39 Queen's Road Central Hong Kong ABSOLUTE PARTNERS MASTER: Creditors' Proofs of Debt Due June 24 --------------------------------------------------------------- The creditors of Absolute Partners Special Opportunities Master Fund Limited are required to file their proofs of debt by June 24, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on May 15, 2015. The company's liquidator is: Henry Li Prosperity Tower, Unit 2102, 21st Floor 39 Queen's Road Central Hong Kong AJW MASTER: Creditors' Proofs of Debt Due June 5 ------------------------------------------------ The creditors of AJW Master Fund, Ltd are required to file their proofs of debt by June 5, 2015, to be included in the company's dividend distribution. The company's liquidator is: Ian Stokoe c/o Ben Henshilwood P.O. Box 258 Grand Cayman KY-1104 Cayman Islands Telephone: (345) 914 8743 Facsimile: (345) 945 4237 e-mail: Ben.Henshilwood@ky.pwc.com AJW MASTER II: Creditors' Proofs of Debt Due June 5 --------------------------------------------------- The creditors of AJW Master Fund II, Ltd are required to file their proofs of debt by June 5, 2015, to be included in the company's dividend distribution. The company's liquidator is: Ian Stokoe c/o Ben Henshilwood P.O. Box 258 Grand Cayman KY-1104 Cayman Islands Telephone: (345) 914 8743 Facsimile: (345) 945 4237 GS PRIVATE: Creditors' Proofs of Debt Due June 26 ------------------------------------------------- The creditors of GS Private Equity Management Offshore, Inc. are required to file their proofs of debt by June 26, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on May 4, 2015. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 INVEST AD: Commences Liquidation Proceedings -------------------------------------------- On May 4, 2015, the sole shareholder of Invest AD GP Company Limited resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Hazem Ahmed Ali Zaidan Flat No. 1506, 15th Floor Al Siri Tower Hamdan Street Abu Dhabi United Arab Emirates INVEST AD CARRY: Commences Liquidation Proceedings -------------------------------------------------- On May 4, 2015, the sole shareholder of Invest AD Carry GP II Limited resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Hazem Ahmed Ali Zaidan Flat No. 1506, 15th Floor Al Siri Tower Hamdan Street Abu Dhabi United Arab Emirates MAHOGANY LTD: Creditors' Proofs of Debt Due June 25 --------------------------------------------------- The creditors of Mahogany Ltd. are required to file their proofs of debt by June 25, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on April 30, 2015. The company's liquidators are: Sarah Bell Mark Bouteloup Citron 2004 Limited Telephone: + 44 1534 282276 Facsimile: + 44 1534 282400 23-25 Broad Street St Helier Jersey JE4 8ND Telephone: 01534 282345 MASTER GOAL: Creditors' Proofs of Debt Due June 25 -------------------------------------------------- The creditors of Master Goal Limited are required to file their proofs of debt by June 25, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 6, 2015. The company's liquidator is: Buchanan Limited c/o Allison Kelly Telephone: (345) 949-0355 Facsimile: (345) 949-0360 P.O. Box 1170, George Town Grand Cayman KY1-1102 Cayman Islands PARTNERS EMERGING: Commences Liquidation Proceedings ---------------------------------------------------- On May 4, 2015, the sole shareholder of Partners Emerging Opportunities Fund Ltd. resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Francois Sakellaridis c/o STG Petit Cerisier 11 1066 Epalinges Switzerland SHAMROCK: Creditors' Proofs of Debt Due June 15 ----------------------------------------------- The creditors of Shamrock are required to file their proofs of debt by June 15, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 22, 2015. The company's liquidators are: Susan Craig Lorna Carroll CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands VENTRA (BARBADOS): Commences Liquidation Proceedings ---------------------------------------------------- On April 29, 2015, the shareholders of Ventra (Barbados) SRL resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Britannia Corporate Management Ltd c/o Gary F. Oakley 196 Raleigh Quay Grand Cayman KY1-1104 Telephone (345) 949 2700 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Fitch Affirms 'B+' LT IDR; Outlook Stable ------------------------------------------------------------- Fitch Ratings affirmed the Dominican Republic's long-term foreign and local currency Issuer Default Ratings at 'B+'. The issue ratings on the Dominican Republic's senior unsecured foreign and local currency bonds are also affirmed at 'B+'. The Rating Outlooks on the long-term IDRs are Stable. The Country Ceiling is affirmed at 'BB-' and the Short-term foreign currency IDR at 'B'. KEY RATING DRIVERS The Dominican Republic's ratings are underpinned by its higher per capita income and more diversified economic structure than peers. The country has a record of resilient growth and macroeconomic stability and benefits from diverse external financing sources. These credit strengths are balanced by the vulnerability of the country's external balance sheet due to its relatively high external financing needs, large exposure of sovereign debt to currency risks, and low international reserves in the context of limited exchange rate flexibility. A narrow revenue base, budgetary rigidities and election-related spending have affected fiscal policy predictability and increased the public debt burden. The Stable Outlook factors in the positive impact from lower international oil prices on the country's burdensome fuel imports and electricity subsidies in addition to the boost to trade, investment, remittances and tourism inflows from the recovery in the U.S. These tailwinds are likely to support economic growth, external accounts and public finances in 2015-2016. However, higher interest rates in the U.S. could increase borrowing costs and currency volatility. Moreover, the uncertainty surrounding the length and competitiveness of the upcoming electoral campaign poses risks to the fiscal accounts. The Dominican Republic has demonstrated resilience through adverse domestic and external cycles. The country's five-year average growth reached 5.2% in 2014, well above the 'B' median of 4.4%, driven by robust private consumption, investment in public infrastructure, mining and tourism exports. In the absence of productivity-enhancing reforms, Fitch expects economic activity will remain robust decelerating to 4.9% in 2015-2016. Cyclical and structural factors are improving the Dominican Republic's balance of payments. The current account deficit (CAD) will continue narrowing to 2.5% of GDP on average in 2015-2016, driven chiefly by low near-term oil prices and strengthening current account receipts (CXR). Fitch forecasts that an improved external amortization schedule coupled with the lower CAD could reduce the Dominican Republic's gross external financing needs to 92% of international reserves in 2015-2016, albeit higher than the 'B' median, 75%. However, the country's external balance sheet remains vulnerable. International reserve coverage has increased in recent years but, at 2.4 months of current external payments in 2014, provides limited buffer against external shocks in the context of an actively managed exchange rate regime. Moreover, net external debt as well as amortization and interest payments, 63% and 16% of CXR in 2014, are higher than the respective 'B' medians. Fiscal consolidation is proceeding in line with government targets. The general government deficit fell to 2.8% of GDP in 2013-2014 from the unprecedented 6.4% in the 2012 electoral year through tax reform and cuts to capital investment. Under Fitch's base case, the general government deficits will moderate to 2.5% of GDP in 2015 driven by lower energy subsidies and increase to 3.4% in the run-up to the general elections in May 2016. Fitch expects the general government to achieve a small 0.2% of GDP primary surplus in 2015, with public debt coming down moderately to around 35% of GDP, below the 'B' median of 50%, due to the recent liability management operation that redeemed PetroCaribe debt. The government's financing flexibility has increased with international capital market and multilateral access and steady development of local capital markets. However, the 73% foreign currency-denomination of public debt and non- resident participation in the local debt market expose the sovereign to foreign exchange (FX) and capital market volatility risks. Inflation is likely to remain subdued near 3% for end-2015, lower than the official 4.0%+/-1% target, reflecting low oil import prices, exchange rate stability and slower domestic demand. While transitioning toward an inflation-targeting monetary regime, monetary policy flexibility remains constrained by quasi-fiscal losses, rapid pass-through of imported costs, and financial dollarization. The 2016 election cycle could slow progress on the reform agenda, particularly as a constitutional amendment to permit consecutive presidential terms takes political precedence in 2015. While the authorities honored the legal mandate to raise funding for education and increased investment in power generation, progress on adjusting tariffs and tackling theft in the electricity sector, and a fiscal pact will be difficult before the elections. RATING SENSITIVITIES The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently balanced. The main factors that individually, or collectively, could trigger a rating action are: Positive: -- Strong growth and investment performance relative to peers without increasing macroeconomic imbalances; -- Fiscal restraint through the electoral cycle; -- Reduction of external vulnerabilities; Negative: -- Fiscal slippage and growth underperformance leading to deteriorating debt dynamics; -- Erosion of foreign reserves and increased macroeconomic instability; -- Emergence of financing constraints. KEY ASSUMPTIONS The ratings and Outlooks are sensitive to a number of assumptions: -- Fitch forecasts that average U.S. growth of 2.9% in 2015- 2016 will support the Dominican Republic's economic growth and external accounts, given the strong trade and financial linkages between the two countries. -- The Dominican Republic's fiscal and external forecasts assume that annual gold production is sustained at 1 million ounces and international prices average USD1200 per ounce in 2015-2016, benefiting exports and mining royalties. Fitch's latest projections also factor in adjustment of the average Brent oil price to USD65 per barrel in 2015 and USD75 in 2016, resulting in reductions in the country's fuel import bill and electricity transfers. -- Fitch assumes that the normalization of monetary policy rates in the U.S. proceeds in an orderly manner and there are no large capital outflows or external market financing constraints for the Dominican Republic in 2015-2016. ============= J A M A I C A ============= JAMAICA: Moody's Upgrades Government Bond Rating to Caa2 -------------------------------------------------------- Moody's Investors Service upgrades Jamaica's government bond rating and government-related entities to Caa2 from Caa3, changes the country ceilings, and maintains a positive outlook. Moody's decision to upgrade Jamaica's rating was driven by the following factors: 1. Fiscal consolidation and strong commitment to structural reforms 2. Improving balance of payments position and reduced external Vulnerabilities The positive outlook reflects Moody's expectation that Jamaica will sustain the reform momentum under the IMF-supported program, solidify fiscal adjustment to put government debt metrics firmly on a downward trajectory. This rating action also applies to the Government of Jamaica's related entities: Air Jamaica Limited, and the National Road Operating and Constructing Co. Ltd. As a result of this rating action, the long-term foreign currency bond ceiling changed to B2 from B3. The long-term foreign currency deposit ceiling changed to Caa3 from Ca. The long-term local currency bond and deposit ceilings changed to B1. The short-term foreign currency bond and deposit ceilings remain unchanged at NP. Ratings Rationale First Driver -- Fiscal consolidation and strong commitment to structural reforms "Despite persistently low economic growth and high debt burden, two factors that constrain Jamaica's rating, the authorities have made substantive progress towards completing their fiscal consolidation program. They have introduced tax and expenditure reform measures, and maintained a large primary surplus of 7.5% over the past two years. We expect these reforms to put public finance on a more sound footing and help reach the authorities' target of cutting debt to less than 100% of GDP by 2020 from a 135% peak in 2013. The IMF-supported program remains firmly on track. It envisages reaching a balanced budget by 2016/17 and maintaining a primary surplus of 7.0% of GDP afterwards, which is necessary to ensure debt reduction. The Jamaican authorities have also approved rules to bolster fiscal transparency and lock in the hard-won gains of the ongoing fiscal consolidation. Several key reforms have been completed to improve Jamaica's business climate including a reform of tax incentives, implementation of the minimum business tax, and simplifying tax return filing for self- employed, allowing the country to advance 27 places on the Ease of Doing Business indicator compiled by the World Bank. The authorities' strong commitment and general consensus over reforms is supporting business confidence and private investment to boost economic growth prospects in the next 2-3 years." Second Driver -- Improving balance of payments position and reduced external vulnerabilities "Jamaica's current account (CA) deficit has narrowed significantly in 2014/15 as a result of continued import compression and the drop in oil prices, with further improvement projected in 2016. FDI flows have rebounded to around 5% of GDP since 2013 and we project they remain at that level, supported by improved foreign investor sentiment and successful privatization of Kingston Container Terminal (KCT) and the Norman Manley International Airport by end 2015. Moody's expects the government's interest bill to drop to less than 6% by 2017/18 from nearly 10% of GDP in 2012/13 reducing the government's financing needs. We expect Jamaica's External Vulnerability Indicator (EVI), which relates upcoming external debt maturities and short term external debt to the level of international reserves to decline to 126% in 2015 from 134% the previous year." Positive Outlook "The positive outlook assigned to the country's Caa2 rating reflects our expectation that the authorities will sustain the reform momentum under the IMF-supported program, and solidify fiscal adjustment to put government debt metrics firmly on a downward trajectory consistent with Jamaica's medium-term goal of reducing government debt to 96% of GDP by 2020. In addition, implementation of the government's growth agenda has the potential to reduce energy cost and boost GDP growth beyond current assumption of around 2% potential growth, which could accelerate the pace of debt reduction." What Could Move the Ratings Up/Down Upward rating pressure could result from: (1) sustained fiscal consolidation to reduce government debt ratios, and (2) higher GDP growth. Downward pressure on the rating could arise from (1) failure to avoid a persistent increase in debt ratios, or (2) reversal of fiscal reforms. Country Ceilings As a result of this rating action, the long-term foreign currency bond ceiling changed to B2 from B3. The long-term foreign currency deposit ceiling changed to Caa3 from Ca. The long-term local currency bond and deposit ceilings changed to B1. The short-term foreign currency bond and deposit ceilings remain unchanged at NP. GDP per capita (PPP basis, US$): 8,609 (2014 Actual) (also known as Per Capita Income) Real GDP growth (% change): 0.5% (2014 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 4% (2014 Actual) Gen. Gov. Financial Balance/GDP: -0.7% (2014 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: -8.7% (2014 Actual) (also known as External Balance) External debt/GDP: 96.2% (2014 Actual) Level of economic development: Low level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On 27 May 2015, a rating committee was called to discuss the rating of the Jamaica, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have increased. The issuer's institutional strength/framework, have materially increased. The issuer's fiscal or financial strength, including its debt profile, has improved. The principal methodology used in these ratings was Sovereign Bond Ratings published in September 2013. JAMAICA: Improved Moody's Rating Will Help Country, Minister Says ----------------------------------------------------------------- RJR News reports that Finance Minister Dr. Peter Phillips is predicting that the improved credit rating issued by international rating agency, Moody's, will help Jamaica in its economic recovery. Moody's has upgraded Jamaica's government bond rating and government-related entities to Caa2 from Caa3, and in doing so, explained that the move was influenced by the government's commitment to its fiscal reform program, aimed at reducing the country's massive debt, according to RJR News. The report notes that it also gave the country a positive outlook, which means there could be further rating upgrades if the current trajectory is maintained. Dr. Phillips said the upgrade will have a positive outcome for Jamaica on the international capital market, particularly in respect of interest rate, the report discloses. Moody's in its notes accompanying the rate upgrade, said Jamaica's economy should grow more robustly in the next two to three years, says the report. =========== M E X I C O =========== AXTEL S.A.B.: Fitch Affirms 'B' IDR; Outlook Stable --------------------------------------------------- Fitch Ratings has affirmed Axtel S.A.B. de C.V.'s Long-term Local- and Foreign-Currency Issuer Default Ratings at 'B' and the Long- term National Scale Rating at 'BB-(mex)'. The Rating Outlook is Stable. Fitch has also affirmed these ratings: -- Senior secured notes due 2020 at 'B+/RR3'; -- Senior secured convertible notes due 2020 at 'B+/RR3'; -- Senior unsecured notes due 2019 at 'B-/RR5'; -- Senior unsecured notes due 2017 at 'B-/RR5'. KEY RATING DRIVERS Axtel's ratings reflect its sound liquidity position following the successful recapitalization during 2013 via the debt exchange and tower sales which led to improved financial flexibility with extended debt maturities and lower leverage. They also reflect positive impacts from telecom sector reform and the company's high exposure to an enterprise business segment in which the competitive intensity is lower than in a residential market segment. The company's ratings are tempered by its weak market position, continued contraction in fixed-voice revenues, and negative free cash flow (FCF) generation due to high capex. The stability of the ratings will hinge on Axtel's ability to sustain EBITDA growth, which is mainly tied to its data and Internet revenues including enterprise/government solutions, which helps mitigate pressures on the traditional voice services. EBITDA growth in line with that of 2014 and the first quarter of 2015 (1Q15) would be necessary to support its working capital and capex requirements without any significant need for external financing. Good Liquidity: Fitch does not foresee any liquidity problem for Axtel in the short- to medium-term as the company faces no sizable debt maturity until 2017. The company has retained a sound liquidity profile since its debt exchange and sale-and-leaseback of its tower assets during 2013. As of March 31, 2015, Axtel held a cash balance of MXN3.2 billion as well as committed credit facilities of worth USD130 million (equivalent to approximately MXN2 billion), which compare to its short-term debt of just MXN493 million. In March 2015, the company agreed with America Movil to terminate all outstanding legal disputes regarding interconnection rates. As part of the agreement, Axtel received a cash payment of MXN950 million which also helped further bolster its cash position. As of March 31, 2015, the company's total debt amounted to MXN11.7 billion, mainly composed of USD50.4 million (MXN764 million) and USD101.7 million (MXN1.5 billion) of 2017 and 2019 unsecured notes, respectively, and USD565.4 million (MXN8.4 billion) of 2020 secured notes, including convertible notes. Other debt included loans and financial leases. Slow Growth Ahead: Fitch forecasts Axtel's revenue growth to remain weak in 2015, contracting since 3Q14, mainly due to the slower-than-expected IT solution and equipment sales to government entities and on-going voice revenue erosion. The weak growth was also exacerbated by the elimination of domestic long-distance charges from 2015 as a result of the telecom reform. During the last 12 months (LTM) as of March 31, 2015, the company's revenues declined by 8% compared to the same period a year ago. Positively, Axtel's gradual revenue mix change is favorable with an increased exposure to enterprise clients and data-based services, away from traditional fixed-voice service and residential segments, where the competitive pressure remains high. Fitch believes that the long-term demand outlook for enterprise IT services is solid, despite recent slowdown, and the company's focus on fiber-to-the-home (FTTH) with IPTV should enable steady subscriber and revenue growth in the broadband segment. These segments should fully offset the ongoing revenue contraction in the traditional fixed-voice service over the long term. Axtel's revenue generation from its residential market segment accounted for just 25% during 2014. Positive Reform Impact: The telecom reform measures introduced during 2014 should continue to help Axtel to moderately improve its cost structure and competitiveness. The company stopped paying interconnection fees to America Movil in August 2014, which has translated to higher operating margins and enabled it to fully offset the revenue erosion from the long-distance charge elimination. During 1Q15, Axtel's EBITDA generation improved by close to 8% to MXN783 million from MXN728 million despite revenue contraction. As a result, EBITDA margin during the period was 32.4%, compared to 24.5% a year ago. Negative FCF: Fitch forecasts Axtel to continue negative free cash flow (FCF) generation over the medium term due to high capex, mainly related to the enterprise business segment and FTTH. As these segments represent the company's key growth area, investments for infrastructure and equipment will remain high over the medium term at around MXN2.5 billion, which is slightly lower than the 2014 level of MXN2.8 billion. In addition, working capital requirements could increase with an increasing volume of business, with the public entities, placing some pressure on cash flow from operations (CFFO). Positively, Fitch does not expect Axtel to need any significant external financing as the negative FCF amount is unlikely to be material and could be comfortably covered by its high cash balance. Stable Leverage: Axtel's financial leverage is likely to remain stable over the medium term with adjusted net leverage below 4.0x due to stable EBITDA generation amid a modest increase in net debt level due to negative FCF generation. As of March 31, 2015, the company's adjusted gross and net leverage ratios, including the off-balance- sheet adjustment for rental expenses, were 4.6x and 3.7x, respectively, which compare to 3.8x and 3.5x at end-2013. Excluding the rental expenses, Axtel's net leverage was 2.8x, which was a slight increase from 2.4x at end-2013 partly due to adverse foreign exchange rate movement. In light of the company's operating profile, Fitch believes that Axtel's leverage is moderate for the rating level. Above-Average Recovery Prospects: Axtel's secured notes rated 'B+/RR3' reflect good recovery prospects in the event of default. These notes are secured by first-priority liens on all capital stock of subsidiary guarantors and substantially all assets. Securities rated 'RR3' have characteristics consistent with securities historically recovering 51%-70% of current principal and related interest. Conversely, the remaining unsecured notes rated 'B-/RR5' are structurally subordinated to the senior debt. Securities rated 'RR5' have characteristics consistent with securities historically recovering 11% - 30% of current principal and related interest. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Axtel include: -- Modest revenue contraction in 2015 followed by low-single- digit growth from 2016; -- EBITDA margins in the range of 28%-29% in 2015 and 2016; -- Continued modest negative FCF generation over the medium term due to high capex; -- Net leverage to remain below 4.0x over the medium term. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to a negative rating action include: Ratings could be pressured in case of material deterioration in Axtel's liquidity and failure to proactively refinance its debt maturities, and/or weak performance due to competitive pressures and low demand leading to persistent negative FCF generation and higher leverage. Conversely, a positive rating action is unlikely given the recent distressed debt exchange in the absence of any significant improvement in the company's financial profile. Over the long term, positive credit quality factors would include improvement in the key operating metrics and EBITDA generation, positive FCF generation and lower leverage on a sustained basis. LIQUIDITY Axtel's liquidity is sound in light of its high cash balance of MXN3.2 billion as of March 31, 2015 which comfortably covered the short-term debt of MXN493 million. The company also has a USD130 million credit facility and does not face any sizable debt maturity until 2017. BANCA MIFEL: Fitch Raises IDR to 'BB'; Outlook Stable ----------------------------------------------------- Fitch Ratings has upgraded Banca Mifel's Viability Rating to 'bb' from 'bb-', and its long-term foreign and local currency Issuer Default Ratings to 'BB' from 'BB-'. The short-term foreign and local currency ratings were affirmed at 'B'. The long- and short- term National scale ratings of Mifel were also upgraded to 'A(mex)' from 'A-(mex)' and to 'F1(mex)' from 'F2(mex)', respectively. The long-term Rating Outlook is Stable. Mifel's Support Rating was affirmed at '5' and Support Rating Floor at 'NF'. The bank's global subordinated debt was upgraded to 'B+' from 'B'. Key Rating Drivers VR, IDRs And National Scale Ratings The upgrade of Mifel's ratings reflects the bank's recently improved profitability metrics driven by higher margins (interest margin slightly above 4% of average earning assets in the first quarter of 2015, compared to an average of 2.6% during the 2011- 2014 period) and well contained credit costs. Despite the higher expenses associated with the changes on the business model, Mifel has been able to revert this effect reaching operating efficiency ratios roughly at 50%. Fitch expects that the recently improved profitability metrics to be sustainable, and will continue to enhance the bank's internal capital generation. The ratings are driven as well by its gradually improved asset quality metrics through lower impairments and a higher reserve coverage ratio (1.37% and 99.4% in the first quarter of 2015 [1Q15}, respectively), but still high concentrations among Mifel's main creditors, together with geographic concentrations. However, these have been gradually easing in recent periods due to the growth in mortgage loans. Its adequate and relative stable funding base is also considered, it is benefitted from a well-positioned customer deposit base that has proven steady and recurring through the years. Mifel's constrained liquidity and somehow deteriorated loans to deposit ratio are rating factors where the bank still has important room for improvement, according to Fitch. The bank's stable capital base is also considered, although it compares unfavorably against it closest local peers. Mifel's Fitch core capital stood at 9.43% in 1Q15, proving stability around 9% despite high loan growth in recent years. The bank's capital position has been supported by capital injections and recently by its improved profitability. Fitch considers that the bank would be able to maintain these capitalization metrics through an enhanced internal capital generation and growth based in lower risk-weighted assets as mortgage loans. Currently, Mifel is expecting a new capital injection but since this has not yet been received, Fitch has not factored in the potential positive benefits. Support Rating And Support Rating Floor Mifel's Support Rating and Support Rating Floor were affirmed at '5' and 'NF', respectively, in view of the bank's low systemic importance, indicating that, although possible, external support cannot be relied upon. Subordinated Debt The bank's global subordinated securities were also upgraded to 'B+' from 'B', two notches below the applicable anchor rating, Mifel's VR of 'bb'. The ratings are driven by Fitch's approach to factoring certain degrees of subordination. Similar securities would typically be two notches lower for non-performance risk and an additional notch lower for loss severity. However, in the case of Mifel, the overall notching is limited to two notches, due to compression considerations (as per Fitch's existing criteria). The notching factor in its non-performance risk (-1) since Fitch considers that the triggers for coupon deferrals or cancellations are relatively high, according to applicable local regulations; and an additional (-1) for loss severity that reflects these securities are plain-vanilla subordinated debt (subordinated preferred, under the local terminology). This issue receives no equity credit under Fitch's approach, since these are dates securities without a loss absorbing feature that triggers before the point of non-viability. RATING SENSITIVITIES VR, IDRS And National Scale Ratings Mifel's ratings could be affected negatively if the improving trends in overall profitability and asset quality are not sustained. Fitch considers that these ratings could be downgraded if operating ROA returns to levels below 1% consistently and/or if Fitch's core capital is not sustained at least at 9%. Material deteriorations of its asset quality metrics and additional pressures of its liquidity profile could trigger a downgrade the bank's ratings. In turn, the bank's ratings could be upgraded in the medium term by material and sustained improvements of its funding profile and overall profitability, together with material reductions in its loans concentration. Support Rating And Support Rating Floor A potential upgrade of Mifel's Support Rating and Support Rating Floor is limited at present, since external support cannot be relied upon, although it is possible. Subordinated Debt The bank's subordinated debt ratings will likely mirror any change in the bank's VR, as this issue rating is expected to maintain the same relativity to Mifel's credit rating, while the bank's VR is at a sub-investment grade level. The rating actions are as follows: Banca Mifel, S.A.: Fitch has upgraded these ratings: -- Long-term foreign and local currency IDRs to 'BB' from 'BB-'; Outlook Stable; -- Viability rating to 'bb' from 'bb-'; -- National-scale long-term rating to 'A(mex)' from 'A-(mex)'; Outlook Stable; -- National-scale short-term rating to 'F1(mex) from 'F2(mex)'. -- Long-term cumulative subordinated preferred notes to 'B+' from 'B'. Fitch has affirmed these ratings: -- Short-term foreign and local currency IDRs at 'B'; -- Support rating at '5'; -- Support rating floor at 'NF'. BANCA MIFEL: Fitch Ups Viability Rating to 'bb' ----------------------------------------------- Following its peer review of the Mexican Midsized banks, Fitch Ratings has upgraded the ratings for these Midsized Banks: Banca Mifel S.A. -- Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-'; Outlook Stable; -- Viability rating to 'bb' from 'bb-'; -- National-scale long-term rating to 'A(mex)' from 'A-(mex)'; Outlook Stable; -- National-scale short-term rating to 'F1(mex) from 'F2(mex)'. -- Long-term cumulative subordinated preferred notes to 'B+' from 'B'. Bansi, S.A. -- National-scale long-term rating to 'A(mex)' from 'A-(mex)'; Outlook Stable; -- National-scale short-term rating to 'F1(mex) from 'F2(mex)'. Banco Multiva, S.A. -- National-scale long-term rating to 'A(mex)' from 'A-(mex)'; Outlook Stable; -- National-scale short-term rating to 'F1(mex) from 'F2(mex)'; -- Long-term senior unsecured debt to 'A(mex)' from 'A-(mex)'. Also, Fitch has affirmed rating to the financial Institution: Banca Mifel S.A. -- Short-term foreign and local currency IDRs at 'B'; -- Support rating at '5'; -- Support rating floor at 'NF'. Banco Invex, S.A. -- National-scale long-term rating at 'A+(mex)'; Outlook Stable; -- National-scale short-term rating at 'F1(mex)'. Banca Afirme, S.A. -- National-scale long-term rating at 'A-(mex)'; Outlook Stable; -- National-scale short-term rating at 'F2(mex)'. -- Long-term subordinated notes at 'BB+(mex)' MAXCOM TELECOMUNICACIONES: S&P Affirms 'B-' CCR; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' corporate credit and issue-level ratings on Maxcom Telecomunicaciones S.A.B. de C.V. At the same time, S&P's '3H' recovery rating, indicating its expectation of meaningful (50%- 70%; upper half of the range) recovery for creditors in the event of a payment default, remains unchanged. The outlook on the corporate credit rating remains stable. "The ratings on Maxcom reflect its 'vulnerable' competitive position due to its operations in only four Mexican states, its small market share, smaller scale than of the larger and better capitalized players in the Mexican market, limited growth potential, and margin pressures amid a highly competitive environment," said Standard & Poor's credit analyst Fabiola Ortiz. Despite S&P's expectation of debt to EBITDA of about 4.0x, some improvement in its credit metrics on higher EBITDA particularly at its commercial segment, and some cost savings, S&P expects free operating cash flow (FOCF) to debt to remain negative in 2015 and slightly positive for the following years as capital expenditures (capex) decrease. Additionally, S&P's analysis considers the potential volatility in the company's financial metrics due to intense competition and the volatility of some of its segments. The stable outlook reflects S&P's expectation that the company will post modest revenue growth, slightly improve its financial indicators, and maintain an "adequate" liquidity for the next two years. S&P could lower the rating if the company's liquidity weakens as a result of intense competition and therefore, S&P starts to perceive the company having a limited ability to make its coupon payments. An upgrade in the next 12 months is unlikely given the company's "vulnerable" business risk profile and S&P's view that competition will remain intense, which restricts the company's small scale and could cause additional revenue pressures and raise churn rates. However, in the longer term S&P could upgrade the company if its scale grows and if debt to EBITDA falls below 3.0x and FOCF to debt is at or above 25% on a constant basis. QUALITAS CONTROLADORA: S&P Affirms 'BB' Counterparty Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'BB' global scale long-term counterparty credit rating on Qualitas Controladora S.A.B. de C.V. (QualCon). At the same time, S&P affirmed its 'mxAA/mxA-1+' national scale financial strength and counterparty credit ratings on Qualitas Compania de Seguros, S.A.B. de C.V. y Subsidiarias (Qualitas). S&P also affirmed its 'BB+' financial strength and counterparty credit rating on U.S.- based subsidiary, Qualitas Insurance Company (Quic). The outlook on all these companies remains stable. S&P's rating on QualCon follows S&P's group rating methodology and standard notching for non-U.S., non-operating holding companies (NOHC). As a result, the rating on QualCon is two notches below the group's credit profile (GCP) as the insurance group has no banking or significant non-regulated businesses. "The rating differential incorporates the ongoing subordination of QualCon's creditors to those of the policyholders of Qualitas" said Standard & Poor's credit analyst Nicolas Lara. "The ratings on Qualitas reflect our view of its 'satisfactory' business risk profile and 'lower adequate' financial risk profile due to its leadership position in the auto insurance segment, positive brand recognition, and adequate operating performance, he added". The rating constraints are the company's monoline profile, capital adequacy slightly below S&P's 'BBB' benchmark, and the relatively aggressive capital management. "Our ratings on Quic follow our group rating methodology and standard notching for the "highly strategically" subsidiaries. As a result, the ratings on Quic are one notch below QualCon's GCP. We view Quic as a "highly strategic" subsidiary due to the parent's strong level of support and commitment and the company's high level of integration with respect to business strategy and enterprise risk management (ERM). In addition, we believe there is a close link between Quic and the group's reputation, and the subsidiary will benefit from the ongoing business of its parent and affiliate in Mexico," S&P said. The stable outlook on both QualCon and Quic reflects that of Qualitas, which S&P expects to maintain its leadership position in the Mexican auto insurance business. The outlook also reflects S&P's expectations that Qualitas will maintain adequate loss ratios and operating performance, despite the rising competition. S&P expects the company to maintain a combined ratio of 97%-98% in the next two years. S&P also expects the company to maintain a capitalization ratio in line with the current ratings and regulatory capitalization coverage to be at least 1.3x. S&P could downgrade Qualitas and therefore QualCon and Quic if: the company's capital falls below S&P's expectations; Qualitas implements an aggressive dividend policy, which weakens capitalization; a significant contraction in the auto insurance business undermines Qualitas' financial or operating performance; or QualCon implements aggressive expansion plans, which would raise its debt and diminish financial flexibility to levels below "adequate." An upgrade is possible over the next two years if Qualitas maintains sound risk management practices and currently conservative capital management, which should improve capitalization levels with a minimal regulatory capital coverage at 1.5x and consistently in line with our 'BBB' benchmark. ====================== P U E R T O R I C O ====================== PUERTO RICO AQUEDUCT: S&P Retains 'CCC+' Rating on Watch Neg. ------------------------------------------------------------- Standard & Poor's Ratings Services said its 'CCC+' ratings on Puerto Rico Aqueduct & Sewer Authority's (PRASA) debt remain on CreditWatch with negative implications. The ratings were placed on CreditWatch on April 25, 2015. "While we view the negotiations with PRASA's committed line of credit providers as a credit positive and another indication that PRASA does not currently share some of the more profound cash reserves and cash flow concerns elsewhere in the commonwealth, PRASA still faces headwinds," said Standard & Poor's credit analyst Theodore Chapman. These challenges include: -- Market access at a relatively economic cost of borrowing that won't eat away at PRASA's recently established financial independence. Regardless of the greater macroeconomic, demographic and fiscal challenges facing the commonwealth, PRASA's own capital requirements remain substantial - but not insurmountable - and largely reflecting unfunded regulatory mandates; and -- Remaining at arm's length from the ongoing budgetary challenges that continue to occupy the attention of the commonwealth's legislature. S&P understands, for example, that the pending bill Act 24 proposes to compel municipalities, agencies, and public corporations to move all cash reserves to the Government Development Bank, but would not apply to any Puerto Rican entity if it would impede bondholders' rights such as those established in PRASA's 2012 master agreement of trust. PRASA, on May 29, 2015, finalized an agreement with its committed line of credit (LOC) providers that removes any immediate contingent liquidity risk associated with a May 29, 2015, due date. The May 29 date had previously been extended from the original date in March. The March extension included paying the LOC providers - Banco Popular and Oriental Bank - a combined $50 million to reduce the total draws to $150 million ($75 million from each bank) from $200 million ($100 million each). S&P understands that the latest agreement includes: -- An increase in the Banco Popular commitment to $90 million from $75 million; -- Completely paying off the Oriental Bank line by using $60 million of cash on hand as well as the additional $15 million in capacity from Banco Popular; and -- An extension from Banco Popular to Aug. 31, 2015, under the assumption that PRASA will explore and potentially execute a bond sale prior to the due date, not only to convert the Banco Popular line to long-term debt, but also to provide funds for upcoming additional capital projects. S&P understands that because PRASA uses the committed LOCs essentially as bond anticipation notes to provide interim financing for previously approved capital improvement projects, PRASA would be legally permitted to reimburse itself for the $110 million it has now paid to date. PUERTO RICO ELECTRIC: Puerto Rico Gets $3.5BB Plan to Fix Utility ----------------------------------------------------------------- Michelle Kaske and Alex Nussbaum at Bloomberg News report that a joint venture including two U.S.-based energy companies is proposing a $3.5 billion plan to modernize Puerto Rico Electric Power Authority (PREPA), Puerto Rico's cash-strapped power utility, which may be pushed to default on its debt. York Capital Management LP, which manages about $26 billion, and energy firms NRG Energy Inc. and ITC Holdings Corp. are offering to build natural-gas generators on the island through their consortium, Puerto Rico New Generation Partners, according to Bloomberg News. In return, the junk-rated power authority, called Prepa, would agree to purchase electricity from the group for 30 years, Thomas Atkins, senior director at NRG Energy told Bloomberg News in a telephone interview. Bloomberg News relates that Prepa has almost $9 billion of obligations and is negotiating with its creditors to potentially reduce that debt load. The new proposal comes as Lisa Donahue, Prepa's chief restructuring officer, is set to give the utility's creditors her plan, Bloomberg News discloses. Caribbean Business earlier reported the New Generation Partners proposal. Bloomberg News notes that commonwealth officials are encouraged by the companies' interest, Melba Acosta, president of the the island's Government Development Bank, said in an e-mailed statement. Ms. Acosta said any award will be made through competitive bidding, Bloomberg News relates. "At this stage of the process, we are not entertaining any particular proposal regarding our modernization plans," Bloomberg News quoted Ms. Acosta as saying. "We are focused on discussing our plan to transform Prepa and reach a fair agreement with bondholders." Savings Pitched Bloomberg News notes that the joint venture's proposed investment doesn't address Prepa's debt load or require the utility to sell bonds to finance upgrades. It would save Prepa an estimated $1.5 billion annually and potentially reduce its average cost per kilowatt hour by nine cents, Bloomberg News relates. Residents on the island pay about twice as much for electricity than people on the U.S. mainland, the report discloses. Under the plan, says the report, the consortium would build and own as much as 1,500 megawatts of natural-gas fired generators plus an additional 400 megawatts of solar projects, allowing Prepa to cut its reliance on expensive fuel oil. The group would raise the approximately $3.5 billion cost, with ITC Holdings spending as much as $500 million to build new transmission and distribution lines across the island, Bloomberg News says. The new gas-fired units would be built in southern Puerto Rico and use existing infrastructure to bring gas onto the island. That would avoid the fights over new pipelines that have sunk past modernization plans, Bloomberg News notes. Bondholder Plan Mr. Donahue declined to comment on the new proposal through Jose Echevarria, a Prepa spokesman. A group of Prepa bondholders in March offered a $2 billion plan to upgrade the utility's facilities, Bloomberg News notes. Mr. Donahue has said that proposal prematurely assumes full and timely payment of debt and wouldn't meet environmental standards, Bloomberg News relays. "Our interests are aligned," Stephen Spencer, managing director at Los Angeles-based Houlihan Lokey, an adviser to Prepa's bondholders, said in an e-mailed statement about New Generation Partners' plan, Bloomberg News says. "Our goal is the improvement of Prepa and therefore we welcome the introduction of any creative solutions that will benefit all Prepa stakeholders." * * * The Troubled Company Reporter on Feb. 4, 2015 reported that Standard & Poor's Ratings Services said it maintained its 'CCC' rating on the Puerto Rico Electric Power Authority's (PREPA) power revenue bonds on CreditWatch with negative implications. S&P originally placed the rating on CreditWatch on June 18, 2014. On Dec. 15, 2014, TCRLA reported that Fitch is maintaining the $8.6 billion of Puerto Rico Electric Power Authority (PREPA) power revenue bonds on Negative Rating Watch. The bonds are currently rated 'CC'. As reported in the Troubled Company Reporter on Sept. 19, 2014, Moody's Investors Service has downgraded the rating for Puerto Rico Electric Power Authority's (PREPA) $8.8 billion of Power Revenue Bonds to Caa3 from Caa2. This rating action concludes the rating review that Moody's initiated on July 1, 2014. PREPA's rating outlook is negative. ================= X X X X X X X X X ================= * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Shareholders Assets Equity Company Ticker (US$MM) (US$MM) ------- ------ --------- ------------ FABRICA TECID-RT FTRX1 BZ 66603695.4 -76419246.3 METROGAS SA-A 153255Z AR 331403741 -24462400.6 METROGAS SA-C 153263Z AR 331403741 -24462400.6 LA POLAR SA NUEVAPOL CI 571550458 -31565432.3 TECTOY-PF-RTS5/6 TOYB11 BZ 27114628.6 -8215580.95 TEKA-ADR TEKAY US 313948165 -395261073 GOL-PREF GOLL4 BZ 3769323901 -125802483 GOL-ADR GOL US 3769323901 -125802483 GOL GOLL3 BZ 3769323901 -125802483 METROGAS-B MGSBF US 331403741 -24462400.6 BOMBRIL BMBBF US 323685704 -31241748 KARSTEN CTKCF US 174656858 -10482924.6 KARSTEN-PREF CTKPF US 174656858 -10482924.6 MANGELS INDL-PRF MGIRF US 176399866 -61689625.2 TEKA TKTQF US 313948165 -395261073 TEKA-PREF TKTPF US 313948165 -395261073 SNIAFA SA-B SDAGF US 11229696.2 -2670544.86 TEC TOY SA-PREF TOYDF US 27114628.6 -8215580.95 PUYEHUE RIGHT PUYEHUOS CI 17878064 -7344408.97 BATTISTELLA-RIGH BTTL1 BZ 120474772 -21271905.1 BATTISTELLA-RI P BTTL2 BZ 120474772 -21271905.1 BATTISTELLA-RECE BTTL9 BZ 120474772 -21271905.1 BATTISTELLA-RECP BTTL10 BZ 120474772 -21271905.1 AGRENCO LTD-BDR AGEN33 BZ 285996574 -543142756 GOL-ADR GOQ GR 3769323901 -125802483 PET MANG-RIGHTS 3678565Q BZ 140957879 -410925540 PET MANG-RIGHTS 3678569Q BZ 140957879 -410925540 PET MANG-RECEIPT 0229292Q BZ 140957879 -410925540 PET MANG-RECEIPT 0229296Q BZ 140957879 -410925540 MMX MINERACAO TRES3 BZ 1223308090 -312940530 INEPAR-RT ORD 3697782Q BZ 1191789041 -214360998 INEPAR-RT PREF 3697786Q BZ 1191789041 -214360998 INEPAR-RCT ORD 3697790Q BZ 1191789041 -214360998 INEPAR-RCT PREF 3697794Q BZ 1191789041 -214360998 RB CAPITAL RBCS3B BZ 13996658.5 -815.062365 MMX MINERACA-GDR MMXMY US 1223308090 -312940530 BOMBRIL HOLDING FPXE3 BZ 19416013.9 -489914853 BOMBRIL FPXE4 BZ 19416013.9 -489914853 SANESALTO SNST3 BZ 21339668.9 -6954061.77 BOMBRIL-RGTS PRE BOBR2 BZ 323685704 -31241748 BOMBRIL-RIGHTS BOBR1 BZ 323685704 -31241748 MMX MINERACA-GDR 0567931D CN 1223308090 -312940530 MMX MINERACA-GDR 3M11 GR 1223308090 -312940530 LAEP-BDR MILK33 BZ 222902269 -255311026 AGRENCO LTD AGRE LX 285996574 -543142756 LAEP INVESTMENTS LEAP LX 222902269 -255311026 INVERS ELEC BUEN IEBAA AR 239575758 -28902145.8 INVERS ELEC BUEN IEBAB AR 239575758 -28902145.8 OSX BRASIL SA OSXB3 BZ 2592199410 -291661108 MMX MINERACAO MMXCF US 1223308090 -312940530 CELGPAR GPAR3 BZ 233784351 -1156798479 RECRUSUL - RT 4529781Q BZ 25757600.8 -21626049.7 RECRUSUL - RT 4529785Q BZ 25757600.8 -21626049.7 RECRUSUL - RCT 4529789Q BZ 25757600.8 -21626049.7 RECRUSUL - RCT 4529793Q BZ 25757600.8 -21626049.7 RECRUSUL-BON RT RCSL11 BZ 25757600.8 -21626049.7 RECRUSUL-BON RT RCSL12 BZ 25757600.8 -21626049.7 BALADARE BLDR3 BZ 159449535 -52990723.7 TEXTEIS RENAU-RT TXRX1 BZ 48951015.5 -73535330.8 TEXTEIS RENAU-RT TXRX2 BZ 48951015.5 -73535330.8 TEXTEIS RENA-RCT TXRX9 BZ 48951015.5 -73535330.8 TEXTEIS RENA-RCT TXRX10 BZ 48951015.5 -73535330.8 CIA PETROLIF-PRF MRLM4 BZ 377592596 -3014215.1 CIA PETROLIFERA MRLM3 BZ 377592596 -3014215.1 NEWTEL PARTICIPA NEWT3 BZ 10517157.2 -10542831.7 NOVA AMERICA SA NOVA3 BZ 21287488.9 -183535526 NOVA AMERICA-PRF NOVA4 BZ 21287488.9 -183535526 EBX BRASIL SA CTMN3 BZ 2592199410 -291661108 GOL-ADR GOLN MM 3769323901 -125802483 OSX BRASIL SA EBXB3 BZ 2592199410 -291661108 LA POLAR-RT LAPOLARO CI 571550458 -31565432.3 ELECTRICIDAD ARG 3447811Z AR 948261051 -148983927 TEC TOY-RT 7335610Q BZ 27114628.6 -8215580.95 TEC TOY-RT 7335614Q BZ 27114628.6 -8215580.95 TEC TOY-RCT 7335626Q BZ 27114628.6 -8215580.95 TEC TOY-RCT 7335630Q BZ 27114628.6 -8215580.95 MMX MINERACAO-RT 4111484Q BZ 1223308090 -312940530 MMX MINERACA-RCT 4111488Q BZ 1223308090 -312940530 GOL-RT 0113333D BZ 3769323901 -125802483 GOL-RT 0113334D BZ 3769323901 -125802483 GOL-RCT 0113335D BZ 3769323901 -125802483 GOL-RCT 0113338D BZ 3769323901 -125802483 PET MANG-RT 4115360Q BZ 140957879 -410925540 PET MANG-RT 4115364Q BZ 140957879 -410925540 INEPAR-RT ORD INEP1 BZ 1191789041 -214360998 INEPAR-RT PREF INEP2 BZ 1191789041 -214360998 INEPAR-RCT ORD INEP9 BZ 1191789041 -214360998 INEPAR-RCT PREF INEP10 BZ 1191789041 -214360998 MINUPAR-RT 9314542Q BZ 76619687.5 -91780261.5 MINUPAR-RCT 9314634Q BZ 76619687.5 -91780261.5 MMX MINERACAO-RT 0626050D BZ 1223308090 -312940530 MMX MINERACA-RCT 0626051D BZ 1223308090 -312940530 PET MANG-RT 0229249Q BZ 140957879 -410925540 PET MANG-RT 0229268Q BZ 140957879 -410925540 RECRUSUL - RT 0163579D BZ 25757600.8 -21626049.7 RECRUSUL - RT 0163580D BZ 25757600.8 -21626049.7 RECRUSUL - RCT 0163582D BZ 25757600.8 -21626049.7 RECRUSUL - RCT 0163583D BZ 25757600.8 -21626049.7 PORTX OPERA-GDR PXTPY US 976769385 -9407990.18 PORTX OPERACOES PRTX3 BZ 976769385 -9407990.18 OSX BRASIL S-GDR OSXRY US 2592199410 -291661108 TEC TOY-RT 1254570D BZ 27114628.6 -8215580.95 TEC TOY-RT 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TEC TOY SA-PF B TOYB6 BZ 27114628.6 -8215580.95 TECTOY TOYB13 BZ 27114628.6 -8215580.95 TECTOY-RCPT PF B TOYB12 BZ 27114628.6 -8215580.95 TEKA TEKA3 BZ 313948165 -395261073 TEKA TEKAON BZ 313948165 -395261073 TEKA-PREF TEKA4 BZ 313948165 -395261073 TEKA-PREF TEKAPN BZ 313948165 -395261073 TEKA-ADR TKTPY US 313948165 -395261073 TEKA-ADR TKTQY US 313948165 -395261073 F GUIMARAES FGUI3 BZ 11016542.2 -151840378 FERREIRA GUIMARA FGUION BZ 11016542.2 -151840378 F GUIMARAES-PREF FGUI4 BZ 11016542.2 -151840378 FERREIRA GUIM-PR FGUIPN BZ 11016542.2 -151840378 VARIG SA VAGV3 BZ 966298048 -4695211008 VARIG SA VARGON BZ 966298048 -4695211008 VARIG SA-PREF VAGV4 BZ 966298048 -4695211008 VARIG SA-PREF VARGPN BZ 966298048 -4695211008 WIEST WISA3 BZ 34107195.1 -126993682 WIEST SA WISAON BZ 34107195.1 -126993682 WIEST-PREF WISA4 BZ 34107195.1 -126993682 WIEST SA-PREF WISAPN BZ 34107195.1 -126993682 ELEC ARG SA-PREF EASA6 AR 948261051 -148983927 ELEC ARGENT-ADR EASA LX 948261051 -148983927 ELEC DE 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MINERACAO MMXM3 BZ 1223308090 -312940530 TRESSEM PART SA 1TSSON BZ 1223308090 -312940530 CIA PETROLIFERA MRLM3B BZ 377592596 -3014215.1 CIA PETROLIF-PRF MRLM4B BZ 377592596 -3014215.1 CIA PETROLIFERA 1CPMON BZ 377592596 -3014215.1 CIA PETROLIF-PRF 1CPMPN BZ 377592596 -3014215.1 PUYEHUE PUYEH CI 17878064 -7344408.97 IMPSAT FIBER NET IMPTQ US 535007008 -17164978 IMPSAT FIBER NET 330902Q GR 535007008 -17164978 IMPSAT FIBER NET XIMPT SM 535007008 -17164978 IMPSAT FIBER-CED IMPT AR 535007008 -17164978 IMPSAT FIBER-C/E IMPTC AR 535007008 -17164978 IMPSAT FIBER-$US IMPTD AR 535007008 -17164978 IMPSAT FIBER-BLK IMPTB AR 535007008 -17164978 VARIG PART EM TR VPTA3 BZ 49432119.3 -399290357 VARIG PART EM-PR VPTA4 BZ 49432119.3 -399290357 VARIG PART EM SE VPSC3 BZ 83017828 -495721697 VARIG PART EM-PR VPSC4 BZ 83017828 -495721697 *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. * * * End of Transmission * * *